Banking major Bank of America Corp. said it received loan approvals worth $24.9 billion for small businesses under the U.S. government's Paycheck Protection Program or PPP. The bank will now provide the needed relief funding to more than 265,500 small businesses, which are struggling due to the lockdowns following the worsening spread of coronavirus or Covid-19 pandemic.
The PPP, overseen by the Small Business Administration or SBA, is part of the Government's $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, aiming to help small businesses, including restaurants, with fewer than 500 employees. However, the initial $349 billion emergency program ran out of funding soon before reaching many struggling small businesses.
Bank of America now said it is the top SBA lender in the second round of funding, which was reopened on April 27.
In the second phase, since the SBA reopened the PPP funding, more than 256,000 of these small businesses have received a loan number. Since that date, Bank of America has sent 213,000 promissory notes to small businesses indicating SBA loan approval.
Of the latest SBA applications, 98 percent are for companies with fewer than 100 employees and 76 percent are for companies with fewer than 10 employees. Further, 93 percent applications are for less than $350,000, while 78 percent are for less than $100,000. The bank also noted that 23 percent of the applications are from low-to-moderate income or LMI neighborhoods.
The bank noted that it hasn't received any fees related to the PPP from the SBA. However, the company announced that net proceeds related to PPP fees will be dedicated to support small businesses and the communities and nonprofits.
Apart from the PPP, the bank has given $2.4 billion loans to small businesses in the first quarter of 2020, up 11 percent year over year.
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